By Emmanuel Ogbodo
MultiChoice Nigeria has defended its decision to increase DSTV and GOTV subscription prices, attributing the hikes to the devaluation of the naira, rising taxes, and other economic factors. This explanation was presented in counter-affidavits filed before the Competition and Consumer Protection Tribunal in response to a case accusing the company of unjust subscription fee increases without the mandated one-month notice to customers.
A three-member panel of the tribunal, led by Thomas Okosu, fined MultiChoice 150 million naira and ordered a one-month free subscription for customers, penalizing the company for ignoring interim orders that restrained price hikes for DSTV and GOTV. The tribunal had initially prohibited MultiChoice from raising subscription rates pending the resolution of a motion filed by Barrister Festus Onifade, who sued MultiChoice Nigeria Ltd and the Federal Competition and Consumer Protection Commission (FCCPC) over the price increase.
In affidavits deposed by Damilola Olatunji on Monday, it was revealed that Nigeria’s inflation rate surged to 31% in November 2023, up from 22.4% in May 2023. The liberalization of the foreign exchange market led to a 68% depreciation of the naira over the same period. Furthermore, the removal of the petroleum subsidy by the Federal Government resulted in significant increases in logistics and transportation costs for businesses in Nigeria. To cope with these economic challenges, MultiChoice increased its subscription prices to the minimum extent possible.
MultiChoice asserted that it had duly notified customers and regulatory authorities before implementing the price increase. “Contrary to paragraphs 6 to 9 of the affidavit in support of the originating summons, the price increment did not create any apprehension in the claimant as it is an inexorable consequence of the fallen value of the naira. The 1st Defendant pays for the right to broadcast each content and operational inputs in dollars,” the affidavit stated.
On November 1, 2023, MultiChoice implemented a 14% adjustment to its subscription prices, driven by escalating input costs, rising expenses for technical upgrades, increasing taxes and levies, inflation, and exchange rate fluctuations. Additionally, the Nigerian Electricity Regulatory Commission (NERC) announced a 230% increase in electricity tariffs for band A customers, which includes most of MultiChoice’s offices and transmission infrastructure. This hike has significantly increased the cost of maintaining a constant power supply to their transmission network.
Despite these economic hardships, MultiChoice has avoided laying off employees or reducing their salaries, even amid high unemployment and poverty rates in Nigeria. The company emphasized that reducing investment portfolios and service quality is not an option, as it would negatively impact the creative industry and the Nigerian economy, affecting new investments, employment opportunities, and the development of creative projects.
MultiChoice has filed a notice of appeal dated June 7, 2024, and an application for a stay of execution of the tribunal’s orders issued on the same date, requesting that all further proceedings before the tribunal be stayed pending the appeal’s determination.
At the resumed hearing, Onifade questioned why the tribunal permitted MultiChoice to file multiple applications. He argued that the tribunal’s primary objective is to protect consumers’ interests and that actions perceived as shielding any party on the wrong side of the law would be detrimental. However, tribunal chair Thomas Okosu restrained Onifade from pursuing this line of argument, emphasizing that both parties have rights. Onifade then applied for time to respond to the counter-affidavits, and the FCCPC’s legal team also requested time to respond. The tribunal subsequently adjourned the hearing to July 29, 2024.
